ADMIN 228 - Winter 2020: First Nations Taxation Business Essay

This essay critically analyzes the complexities of First Nations taxation, focusing on its impact on business and governance. The essay begins with an introduction to taxation's role in nation-building and revenue generation, specifically within the context of First Nations. It then explores the Indian Act and its implications on taxation, including tax exemptions, municipal jurisdictions, and the tax treatment of First Nation governments. The essay identifies key problems, such as implementing new revenue options, pricing contracts for services, political representation, and the relationship between tax services. It evaluates the Indian Act, highlighting challenges and the need for reconciliation. The essay also discusses the implementation of taxation by First Nations and the benefits it provides to the community by providing local services. The author uses multiple sources to support their claims and argues that the complexities of First Nations taxation requires harmonization and coordination to avoid the costs associated with an independent tax system. The essay uses the article "In Praise of Taxes: The Link Between Taxation and Good Governance in a First Nations Context" to support the analysis.

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Introduction
Taxation is an important part of any nation as it provides the foundation of building a
country both economically and financially. Tax helps to build the future of the country by
generating revenue. First nation government needs the tax implementation as they know the
benefits. All the elements of the tax are addressed by the help of negotiation treaty which could
be the tax power of the first nation government, tax treatment for members and tax treatment for
first nation government (Fox, 2017).
Tax is the basic feature of every government that not only provides financial resources to
the government but also gives them the power. It allows the government to perform various
programs and services which also serves as the mean of increasing the accountability of the tax
government and the taxpayers. In context to the first nation, government has to create the ability
to charge the direct taxes. Canada and British government has prepared their negotiation on the
first nation tax which would be applicable to all. Tax power of the first nation government
operates with the continuing tax authority of Canada which is provided by the Canadian
constitution. Canada first nation taxation agreement with other countries has already been
negotiated under which Canada agreed not to impose some portion of this taxes. First nation tax
is made by keeping the Canada tax department harmonized. This new agreement taxpayer need
to ensure that the tax burden remains on the both the party of a transaction. So with the help of
the coordination and harmonization first nation government implement tax by avoiding the cost
which are related to an independent tax system like designing cost, implementation cost and
administrative cost (Venter & Miethe, 2018).

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Under the Indian Act all Indians are eligible for the tax exemption in respect to the
property or income which is situated on a reserve. First nation redefines the relationship between
the governments whereas the Indian Act ceases to apply the post treaty and the tax exemption
rules under the Indian Act. This tax exemption is based on time to allow the individual to make
and adapt according to the taxable status. First nation reserves the existing municipal jurisdiction
even if the reserve is done by one or more municipalities. Once treaty is signed the first nation
reserves to settle the land treaty. All the land treaty is going to settle under the jurisdiction of the
first nation regardless of the land and the treaty of settlement done previously by the municipal
jurisdiction. According to the agreement between Canada and first nation, all resident on the
treaty settlement of land are needed to pay the property tax to receive the service from the first
nation government. Municipality will be no longer responsible in providing services on land as
land are become the part of the treaty settlement. Municipality will also be not allowed to collect
property taxes on lands. So the tax treatment of the first nation government and its entities will
be addressed in the non treaty agreement which is known as the tax treatment agreement (Harris,
2016).
Problems
There are numerous advantages that are provided by the first nations through the Indian
act and Income tax act. Canadians who are Indian are protected under the Indian act. Taking
advantages of this has lead to the building of complexity in businesses as a result many first
nation businesses are not able to take the full advantage of the protection offered by the first
nation. All necessary first nation institution takes their place among the Canadian government by
participating in the market which was created over the past decades. Some of the issues that are
related or raised due to the first nation are the followings (Harris, 2016).

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Implementing new revenue options – The main objective of the first nation is to raise
revenue for the local government. All the development cost and the property tax law are
approved by the first nation tax commission. Development cost charges are similar to the
municipal development cost as they are charged as one time tax for any new development that
will help to build the financial infrastructure. All the governmental revenue is used for some
specific projects which are for long term capital gain. Another revenue opportunity for the first
nation is by charging tax on business activities which also includes collecting taxes from hotels.
Here some of the first nation is interested in collecting hotel tax which would duplicate the tax
collected. This tax will provide the required amount of revenue to the first nation and lead to the
development of nation (Wilson, 2020).
Pricing contract for services – There are many services performed by the first nation,
regional district and municipalities. There are variable rate of tax on property which is used by
the Canada and British government. First nations with the residential land generate revenue at a
service cost at the rate fixed by the adjacent jurisdiction. Due to having of equivalent tax rates,
first nation enters into the service contract which is based on the tax revenue instead of the actual
cost. Municipalities also sale services on the tax revenue which is equivalent to the cost of
services. Provisional policies are also collected from the schools as tax on first nation lands
which provided the first nations an additional resource to improve the infrastructure. In addition
to it they get service which is beyond the municipal or rural tax. First nations those were using
variable tax rate has used budget based tax as done by the municipalities. It leads to either rise or
lower of property tax rate (Levesque, 2017).
Political representation – Under the first nation taxation lands are taxed without providing
any service. At the same time the lease holders who are occupying the lands were allowed to

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vote in the municipal election. With this first nation exercise the jurisdiction over the first nation
land which were taxed and serviced. First nation lease holders have no power in the first nation
policies that were taxed and provide service on the leased lands. It is become the part of the
direct financial interest of the first nation who is always trying to maximize the value of the
leased land while providing service at a reasonable price. First nation always provides decisions
over the lease holders land and to fulfill this responsibility the first nation tax commission has
provided the legal and administrative framework. First nation tax commission has developed a
sample taxpayer who represents the law that ensures the taxpayer to resolve the dispute if any
arises. This system is comparable and more inclusive to support the rules. Another issue that the
first nation members and lease holders comes under the municipal boundaries are allowed to vote
in the municipal election though they are not part of the municipality services. Both the
regulation and taxes are provided to reserve until and unless it is coming under the first nation
government (Zurba, Diduck & Sinclair, 2016).
Other tax service relationship – In order to the matching representation there are many
tax services that provide the benefits like in case of district hospital. District hospital may have
small property to provide the services for which proper planning and capital is required. First
nation government has the governing board that have the same member of the regional district.
All the first nation lease holders and members have the access to the service provided in the
community. First nation members are covered under the federal government which is actually the
part of the board. Main issues in the main land is the Tran slink which is essential to provide the
governmental body a significant property to tax on the regional district and its related area. All
the residents who are unaware of the first nation are also included in the planning and
governance of the Trans link. Tran’s link likes to obtain the tax revenue from the first nation

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where the governance system needs to be revised or included in the first nation by participating
in the governmental matters. All the participating members have no right to take decisions about
the first nation.
Planning and mutual boundary coordination – There are more than forty five reserves
which are included in the definition of the municipality and they form as the part of the
geographical municipal boundaries. Municipalities provide opportunities for cooperation with
the mutual benefit which also attracts the business for development within one government to the
others. These may create issues in the regional districts who have the growth strategy that have
been included in the first nation participation. The entire regional districts are specially designed
to provide and promote the service of land uses and planning. While some of the regional
districts are functioning with few members to create growth strategy to have access to the
designated function. First nation lacks with the facility of dealing with the municipalities as they
don’t have the proper dispute resolution process. One of the major problems that the first nation
is facing is the economic development which was never included in the part of planning or
growth strategy. First nation creates a major impact on the government decisions as they took the
first nation interest first. In account to the past decisions municipality and the regional district
make their decision makings. This creates mutual benefits that have more regular process in
solving disputes. Single government has the jurisdiction to impose all the institutional
arrangements and this is because of the provisional government who creates the legal structure
for the municipalities and regional districts. So it is the federal government and the First Nation
Tax Commission who creates the legal framework and structure for the first nation (Poucette,
2018).

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Evaluation
Indian act was founded to complete the implementation of the first nation with the proper
system of governance and with many other aspects. Indian act was used as the primary tool to
achieve the discrimination in the first nation. Canada has imposed the rule which was combined
with the hierarchy for transmission of new rules. Considering this there was no remedy for this
unfair and longstanding discrimination. Indian act consist of one violation of the treaties which is
the right to self determination of every human. It was possible to eliminate the discrimination by
passing the legislation of gender based discrimination and racial concepts. There are many
challenges which will come across after the implementation of Indian act. First nation need to be
guided by the rights of the treaty with the minimum standards that are stated in the declaration
rights (Zurba, 2019).
First nation are inherent with the jurisdiction of the Indian act as well as Canada which is
in respect to the jurisdiction of the citizenship. In relation to the first nation jurisdiction and law
all the citizens are recognized as per the treaty. First nation is ready to work with the Canada to
make the rights recognized and reconcile so that it can be jointly designed and processed. To
ensure that all the rules are implemented properly for the rights of the people, joint law and
policies has been established. Indian act is been used as the instrument for the implementation
first nation treaty. In relation to the Indian act and all its discrimination provisions are used for
denying the legal status of many citizens while it is also used as the beneficiary of the treaty.
The most important problem of the local government is that there is no system to collect
the taxes but being the provisional government they had to show the tax collected from the lease

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holder. With the enforcement and lack of cooperation from the first nation whose main objective
was to collect tax.
Conclusion
In Canada more than 30 % of the first nation property tax is responding to the needs of
the community while providing local services to the taxpayers. The First Nation Tax
Commission is the governing body that controls and supports the first nation taxation under the
First nation fiscal management act and Indian act. The main purpose of the first nation tax
commission are beyond the property tax and local incomes as they are also creating the legal and
infrastructural framework which is necessary for the economy growth. It also helped in creating
competitive investment market which worked as a catalyst for the economic growth. First nation
tax commission ensures the operation of the first nation tax system for operating efficiently and
effectively.
First nation was successful in implementing property tax while providing service to the
community. There are more than 150 first nation taxing states who are earning more than $ 80
million every year. First nation agreement is performing well with both the first nations and
municipalities. Economic development is expanding while value of the assessment is rising
continuously. With the help of the revenue generating from different sources has made the first
nation to build the required infrastructure that will support the economic expansion. All the gaps
that have been hindering the economic growth are also addressed in the first nation agreements.
First nation are continuously increasing their participation for the benefit of the regional
economics and to the government.

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Reflection
There is always a requirement of suggestion to create a positive affect between the first
nation and the local government so that it can lead to a strong nation. Promoting and supporting
the economics of local government to create a strong relationship between all the nations.
Developing the process of removing the first nation from the municipality areas so, the first
nation can clarify the service by performing their responsibilities. Considering all the projects to
be coordinated with the first nation and non treaty first nation so, that they can directly
participate in the planning, services and infrastructure. Other first nation must participate to get
the opportunity to work in all government projects. All the first nation must work together to
encourage the legislation changes and applying them to the first nation so, that they have the
access to the institutional services for long term infrastructural capital.
With the evaluation of the first nation in the British and Canadian government system
helped to provide a base for increasing the productivity of the first nation while improving the
market economy. These changes are going to take a long time to occur as it is not easy to
implement. However the first nation and local government shares the same room where they
need to contribute to understand administration issues for all the government. Among all the
most important is to create a strong relationship between the first nations which will help in
providing institutional support and coordination.

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